Three core characteristics of a purposeful leader

The latest EY Lane4 white paper, Ambition to Action: How to attain purpose-led transformation (pdf), provides practical insight for leaders who seek to put purpose at the core of their business. Based on a survey of over 2,000 employees (including 500 at C-suite level), interviews with 20 trail-blazing leaders and a rigorous literature review, our research encourages leaders to use organisational purpose as a compass to guide decision-making and deliver wider stakeholder value.

Global issues such as climate change, COVID-19 and poverty are becoming bigger, more complex and more interwoven than ever before, and there is an increasing demand for global businesses to take action. I believe that responsibility rests on all our shoulders to be, and create, the purpose-led leaders of the future. This research provides a useful guide.

What are the characteristics of a purpose-led leader?

Our research has caused me to reflect on my own leadership practice, as well as my experiences of working with numerous Boards and senior leaders over the years. Below, I have summarised the three core traits that I have found to be critical:

1. Leaders who embody the organisation’s purpose

When I co-founded my business, Lane4, over 25 years ago, I had a clear vision. I wanted to make a positive difference to people’s working lives and to leave a legacy – both for my employees and those we served in our client organisations. We boosted this purpose journey in July 2021 by becoming part of the EY UK team, joining together with the clear purpose of building a better working world on a global scale. It would have been unthinkable for me/us to fold into a business that existed for any other reason. Even during my swimming career, sustaining my performance over time was as motivating for me as winning in big competitions. As a leader of people, it has been the same. Making a positive, sustained difference to people’s lives, and therefore their performance, is how I live my life. It’s what gets me out of bed every day. It’s part of who I am. And I think this congruence between personal values and purpose is fundamental to being a purposeful leader.

From my standpoint, many organisations are doing a good job at shifting purpose from aspiration to reality, striking a balance between internal and external activities that serve their stakeholder ecosystem (e.g., their clients, their people, their shareholders and society). However, our survey revealed that a fifth are at risk of ‘purpose-washing’, in other words, professing to fulfil a greater purpose but in reality misusing purpose for commercial gain. For me, it’s always been about doing the right things for the right reasons and making this a non-negotiable for my people too.

Takeaway:

Closing the gap between what you say and what you do is fundamental for leaders of purpose-driven businesses.

2. Leaders who communicate openly about purpose

A key finding from our survey was the extent to which purpose statements have been crafted but not effectively communicated by leaders. 86% of employees said their organisation has a purpose statement but nearly half (42%) of them didn’t know what it was.

One of the biggest responsibilities of a CEO is to take on the role of chief purpose officer. And a core characteristic of a great chief purpose officer is the ability to galvanise, engage and enrol people into a shared purpose. I have found the best way to do this is through storytelling as it can capture people’s imagination with a meaningful narrative that is unique to them. At their best, purpose stories should be told with an intimacy and a level of disclosure that encourages honesty of thought in those listening. We know that beliefs, feelings and emotions are the things that really influence behaviour, so being able to communicate at this level is critical for making purpose-driven change happen.

Demand for organisations to provide more meaningful work is rapidly increasing and this is backed up by our data which showed that 84% of employees feel it’s ‘very important’ or ‘important’ for them to work for an organisation that positively impacts society. Furthermore, 74% of Gen Z (aged nine to 24), 72% of Millennials (aged 25 to 40) and 62% of Gen X (aged 40 to 54) are ‘very likely’ or ‘likely’ to leave their current employer for an organisation whose reason to exist has more meaning to them. Stories provide a safe environment for sharing personal tales at an emotional and transformational level, helping people to connect to both the organisation’s ‘why’ and also ‘how’ they can meaningfully contribute through their own efforts.

As I wrote about in a previous article about human-centred employee experience, at EY Lane4 we refer to the heart – purpose and the head – ambition. Our purpose is to build a better working world by improving people’s working lives, and our ambition is to reach as many leaders and managers as possible. Establishing this has helped to build a detailed strategy about how to achieve our ambition, and the organisational goals underpinning it.

Takeaway: 

In the era of the Great Resignation and chronic talent shortages, communicating about purpose with dedication, determination and detail is essential for reducing employee turnover and attracting top talent.

3. Leaders who make decisions with organisational purpose at the heart

Leaders are often in positions where they can make decisions for the business, whether at a macro or micro level, and most of these decisions should be made through the lens of purpose. However, this becomes more complex when you consider the different demands of your stakeholders (e.g., customers, employees, investors and suppliers). Organisations that are guided by a meaningful purpose, rather than purely financial goals, will make decisions that have a positive and sustainable impact for all stakeholders.

Surprisingly, however, our survey showed that the majority of organisations are still a long way from being purpose-led. 71% of employees think their leaders still ‘always’ or ‘often’ make critical decisions solely based on financial considerations (i.e., profit, costs and growth) and 43% think that companies mostly reward and renumerate people for generating revenue and growing market share.

There is strong evidence that companies with a well-integrated purpose benefit from incremental value and outperform their competitors¹; it needn’t be an ‘either/or’ situation for leaders, but a ‘both/and’ one. In other words, it’s eminently possible to both contribute positively and make a profit.

Personally, I am a big advocate of our previous EY Lane4 research which revealed how, alongside being purpose-led, a distinguishing characteristic of future-fit leaders is their ability to hold seemingly paradoxical mindsets, balancing sets of conflicting beliefs, attitudes and values. For example, as a leader of Lane4 and now Managing Partner of EY Lane4, I have found being ‘ruthlessly caring’ a key tenet of my leadership practice.

In other words, making tough decisions to achieve performance but remaining compassionate no matter what. In practice, this might mean effectively collaborating with suppliers; aligning business activities with the environmental concerns of clients; being socially accountable to the public. Personally, this approach to business has always given me a sense of fulfilment and has also, I believe, underpinned our performance edge.

Takeaway:

It’s possible to make both purpose-driven decisions and balance the interests of different stakeholders. The key is to have a meaningful organisational purpose at the heart of your business strategy.

A final word of caution for purposeful leaders

As highlighted in this white paper, leading purpose-led transformation can be exhausting. If you’re passionate about purpose it can be difficult to switch off. Make sure you introduce protective factors and habits to avoid getting purpose fatigue. Personally, I am looking after my own wellness by building daily mental and physical breaks into my diary.

To deliver purpose-led transformation, you need to be at your best psychologically, physically and emotionally.